Think of the Duchess of York as an opportunity, not a £5m deadweight of writhing embarrassment. Think bankruptcy, of course, but think of what lies beyond. Think getting the cost of the monarchy under proper control at last – and, as taxpayer, paying for what we want, not what we're told we must stump up for. Think democracy, in short.

Sarah Ferguson is an extreme case, to be sure: an airhead of barrage balloon proportions who in the latest accounting, didn't even realise that three lawyers in a room cost three times as much as one. She has no visible means of support except for her residual title. She bungles her way bemusedly through life leaving rivers of red ink in her wake. But she used to be married to the Duke of York, who declines to dump her utterly. And she remains the once-and-for-all-time mother of his daughters. She is a problem that swallows cash for breakfast, lunch and supper. A problem that won't go away.

Treat the flailing duchess as the symptom of wider problem, though, and you can begin to glimpse answers. Fergie's a nightmare because, every week of the year, she sinks further into the mire. She can't begin to service the debt mountain on her doorstep. She'd be no better off if the Queen sold Balmoral to Beijing venture capitalists and devoted the proceeds to bailing her out. The duchess would just keep on spending regardless. The pit would be larger, not smaller.

Does that sound a brilliant solution for an era of coalition-curdled austerity? To the contrary, it's another public relations disaster waiting to happen. Therefore voluntary bankruptcy – and the modest opprobrium that will go with it – is the only sensible show in town. (It might even give the duchess a theme for one of her instant books: My Hundred Best Tips to Surviving on Nothing.)

Meanwhile, our chancellor has related dilemmas on his mind. George Osborne froze the Queen's civil list grant at £7.9m in his first budget. It's been stuck so long at that level you might even talk permafrost. However, come 2012, big changes are afoot. Instead of getting support under all manner of different headings HM will get a single, consolidated bundle of cash. In one way, it's a macabre parody of Iain Duncan Smith's plans for the benefits system. In another way, as the Queen celebrates 60 years on the throne, it could be a ruse to restore her shrunken finances without anyone quite following the detail.

Nevertheless, opportunity knocks. The royal family, remember, is known inside and outside its paywalls as the Firm. It gets sundry grants and tax favours. It delivers pomp, circumstance and patriotism in return. But follow the logic. George Osborne is proposing a single lump sum to cover everything. He'll be treating Queen Services plc just as he would an engineering giant building Crossrail. Here's a contract to be delivered. So why leave the rest of the family – no, the rest of the Firm – out?

Should the Duke of Edinburgh, as now, receive nearly three times as much as the prime minister for playing eternal consort? Should the heir to the throne, flush with Duchy of Cornwall largesse, be allowed to continue netting £18m or so for his own particular purposes? What, precisely, are Princess Anne and Princes Andrew and Edward worth? Who works full-time for the Firm, and who could be swiftly laid off?

Throw in Duchy revenues, civil list money, plus all the separate payments for this or that expense, then make the family as a whole an offer it can – or can't – refuse. Here's £30m a year, say, for a full schedule of events. One sum, one contract. We'll treat you – Philip, William, Harry et al – as a single corporate entity, not an assortment of individuals. We'll expect significant savings from one combined press office, one IT system, one main residence, one security detail, one central employment agency. And when the contract comes up for renewal, we'll have a vote on what we don't want any longer. To HRH speeches on architectural heritage: £750,000? Thanks, but no thanks.

It's a clean, coalition-blessed road forward. It's transparent and business-like as could be. It would probably come to Prince Charles' rescue when he eventually becomes king (because his current miasmic spending won't work on the throne). As for Fergie – well, every firm has a final redundancy package in its locker somewhere.